personal finance

When A ‘Lifequake’ Hits: What to Do When Your Whole World Breaks Open

If life has thrown you for a financial loop, how do you pick up the pieces? One at a time. Start small and you’ll be amazed how you can bounce back from a job loss, foreclosure or recession.

Remember the 2008 Great Recession?

About 13 years ago, many experts felt our economy was on the brink of annihilation, effectively in a free fall, perhaps a repeat of the Great Depression. Terms like “Too Big to Fail,” “TARP” and “Sub-Prime Mortgage Crisis” became household words. Massive layoffs caused unemployment to top out at 10% in October 2009. Hundreds of thousands of  workers were being let go month by month. Home foreclosures rose by a record 81% in 2008, and over 860,000 families lost their homes that year. And the stock market? The S&P 500 declined by 56.8% from its peak in 2007 to its trough in 2009.

Workers from all socio-economic backgrounds suddenly found themselves without jobs and many with nowhere to live. They urgently tried to reinvent themselves just to put food on the table. For a huge portion of our nation, any sense of financial security had been stolen from them forever.

Hindsight is 20:20, as the saying goes. And looking back over the last decade, we now know the economy recovered, unemployment dropped to record lows, the stock market came roaring back, and the housing market eventually improved. Yet at the time, so many found themselves profoundly unprepared for the financial and emotional fallout of this infamous economic storm.

Caught Off Guard and Bowled  Over

Have you ever been caught off guard by a major life event? Maybe you were caught unprepared in 2008. Maybe you found yourself unprepared by a sudden death of a spouse or partner. Maybe you are stumbling through a divorce. Maybe you have recently suffered a life event so big that for a moment it took your breath away. If any of these circumstances describe you or a loved one, chances are the day it happened is now etched into your memory.

And the words “Now what?” still echo in your thoughts.

When the big one hits, the ground shifts below us. For a moment we may hear nothing; our world stands still. Perhaps we feel our breath catch. As bestselling author Bruce Feiler writes in his book, Life Is in the Transitions, this sudden and serious event or series of events is called a Lifequake, “because the damage they cause can be devastating, they’re higher on the Richter scale of consequence, and their aftershocks can last for years.”

We expect life to be a series of changes, adaptations and recalibrations. Some situations call on us to take a slight left or change our perspective or just pause and regroup. Those are easy enough to navigate. But a Lifequake? It asks much, much more of us.

In this state, we feel dazed and disoriented. We are asked to muddle through the coming days and weeks while living in a heightened state of fear, anger and often grief until we can reclaim our place in this new world. And begin again.

Finding Your Safety Zone

It follows that Lifequakes can have a huge impact on our sense of financial stability. We can lose our income, our home and even our financial future we’ve spent years building.

So now what? What options do we have to get our financial footing back? What choices do we need to make to get ourselves back on track and into our safety zone? First things first, they say. But what comes first?

People inherently have a great deal of resistance to change and transition. And having others tell us we must make a decision is not helpful. We end up feeling more overwhelmed and resentful with an even greater sense of inertia. Whether it is money for today or tomorrow, a new roof over our head, or just one less sleepless night, we are being called to make a transition not of our choosing.

If “Now what?” is running on repeat in your head, here are some ideas for successfully navigating the start of your transition:

1. Take time to get your bearings

You have just suffered a shock.  It  can  be  very difficult  to  make  good  decisions under such extreme stress. At this moment, how are you feeling, emotionally and physically? If you are struggling with either or both, getting support is your first priority. If you are reasonably able to manage your daily routine, set aside 15 minutes a day to address your short list of what needs to be done and remind yourself you are in control.

2. Focus on the immediate financial concerns

How much cash is in the bank and investment accounts? What bills need to be paid this month? If paying a bill is a concern, call the provider to let them know. If the house payment is very late, set aside all other items on your list to focus on this one thing until you have a workable, albeit temporary, solution.

3. Think of time as an illusion

We often place unnecessary demands on the time we have to move forward. Right now, you do not need to know the answers to all your questions. You do not even need to know all your questions. Nor do you need to solve everything all at once. You just need to tackle each concern as it comes up on your list. Go ahead and set a date to complete each item. If you miss a deadline, set another one. Prioritize and re-prioritize as needed so that your list works with you —not against  you. You are in charge of your time.

4. Expect to feel off-balance

The ground has shifted, and it will take some time for you to feel like you are back on solid footing. If you find yourself waking up frequently in financial panic, set an appointment with a financial planner to help you face the facts and create a financial path forward.

The Power of Small Decisions

Throughout life’s transitions, you are changing, whether you know it or not. Adaptation happens. You will see that with each decision you make your resistance to change weakens and your willingness to accept your new future grows stronger. Perhaps not in leaps and bounds, but baby step by baby step.

You will also find there are professionals who can help guide you through these early days of your Lifequake. Always remember that progress is progress, no matter how small. And your adaptation is the key to accepting that while your life is going to be very different, it can also be very good  again.

Note: Investment advisory services provided through TC Wealth Partners, LLC, an investment adviser registered with the U.S. Securities and Exchange Commission. Trust services and retirement plan services are provided by the Trust Company of Illinois, a trust company chartered by the Illinois Department of Financial and Professional Regulation. Past performance is not indicative of future results. The content of this article is for guidance and information purposes only and is not intended to be construed as advice or solicitation of any particular security, strategy on investment product. Information provided is not intended to provide investment, tax or legal advice.

About the Author

Nancy Bell, CFP®, CDFA™

Wealth Adviser, TC Wealth Partners

Nancy Bell is a Certified Financial Planner™, Certified Divorce Financial Analyst®, Chartered SRI Counselor™ with 25+ years of experience in personal comprehensive financial and wealth planning. She is a wealth adviser and voting member of the investment committee at TC Wealth Partners, located in Downers Grove, Ill.

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